Mensa follows thrasio-model: 1) If interested in a brand/business, sign Letter of Intent 2) Due Diligence ⇒ Financial statements, sales, costs, marketing etc. 3) If satisfied with brand health & future growth, share valuation to buy – Buidd
Time to become a Unicorn startup: – PayTM & Flipkart: 5 years – Ola: 4 years – Udaan: 2 years ⇒ Mensa Brands: 6 MONTHS! Best part ⇒ It is NOT an “original” idea — just great timing & execution! Why are VCs going gaga about Mensa Brands? Let’s uncover 🧵
1/ What are “Thrasio-style” startups? It all started in 2018 with a US startup, Thrasio. Business model: 1) Acquire top-performing businesses ⇒ Revenue > Costs = Solid profits 2) Avg deal size = $4-5mn 3) Takeover the business & manage it end-to-end (contd.)
Thrasio (OG startup) stats: – Acquired 100+brands – $500 million revenue – $100 million profit – $6 billion valuation in only 3 years!
2/ Is this space heating up in India? VCs love thrasio-model startups! In India, 1) GlobalBees ⇒ Biggest Series A funding in India of $150 million 2) 10Club ⇒ Largest seed round of $40 million, in <1 year of founding 3) GOAT Brand Labs ⇒ Series A funding of $36 million
3/ So, what’s Mensa really about? Follows thrasio-model: 1) If interested in a brand/business, sign Letter of Intent 2) Due Diligence ⇒ Financial statements, sales, costs, marketing etc. 3) If satisfied with brand health & future growth, share valuation to buy (contd.)
4) Business founders get money and/or profit-share 5) Real execution ⇒ In-house experts experts take over to build the brand and scale the business rapidly
5/ How were they able to raise such a big round? Mensa raised $135 million at a valuation of $1.2 billion. – Thrasio-model is already popular with VCs – Mensa founded by Ananth Narayanan, ex-CEO of Myntra and co-founder & CEO of Medlife ⇒ Huge credibility
6/ So much money! Where does it go? 80% fund raise to acquire new brands ⇒ $108 million Average deal size ⇒ $4 to 5 million Assuming avg $4.5 million, 108/4.5 = 24 brand acquisitions Mensa plans to acquire 40 brands in next 12-18 months, so another fund raise is coming!
7/ Is Mensa Brands going to succeed? Founder claims it’s already profitable! To succeed in long term: 1) Skillset: Need brilliant execution — marketing, supply-chain, pricing etc. 2) Market dynamics: Thrasio planning to enter India soon ⇒ Tough competition